2017 (8) TMI 651

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....f the appellant, is bad and unsustainable in the eye of law. 2. CIT (A) grossly erred in confirming the treatment of income from business as income from house property, without properly appreciating facts in proper perspective; and hence the addition was bad in law. 3. Without prejudice, the CIT (A) ought to have appreciated that even memorandum of association as well as Articles of Association mandated the letting/leasing and hence the income there from was nothing but business income under S.28 of the Act and hence ought to have held that the addition as made by the AO was unsustainable in the eye of law. 4. Without prejudice, the CIT (A) ought to have allowed netting of the expenditure, incurred towards staff, ....

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....itted that the assessee has leased out its business asset being factory premises due to the reason that the textile business of the assessee was discontinued. He has further contended that due to the recession in the business the assessee discontinued the business of textile mill and let out the factory building. He has further submitted that the leasing out of the plant and machinery and building is provided as business activity of the assessee as per Article of Association and Memorandum of Association. He has referred to Clauses 14 to 17, 37 to 39 of Memorandum of Association and submitted that in accordance with the clauses of Memorandum of Association leasing out the plant, furniture, etc to commercial undertaking is a business activit....

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....l and let out the factory premises to the following persons : i) Professional Marketing Group. ii) Frontline Marketing. iii) Indras Agency. It is also not disputed that leasing of plant and machinery, godown, and building is one of the business objects of the assessee company as per the Article of Association and Memorandum of Association. It is not the case of the assessee that it has temporarily closed the business activity due to some lull, but the business of textile mill has been permanently discontinued. Therefore the business asset of the assessee company were let out to different persons. Since the assessee has received the rentals from letting out of not the building structure only but it is a factory ....